IFRS S1 is the inaugural general sustainability disclosure standard issued by the International Sustainability Standards Board (ISSB), a body established by the IFRS Foundation at COP26 in Glasgow (November 2021) to consolidate fragmented ESG reporting frameworks. Published in June 2023 alongside the climate-specific IFRS S2, S1 sets out the core content and overarching requirements for how a company should disclose sustainability-related risks and opportunities that could reasonably be expected to affect its cash flows, access to finance, or cost of capital over the short, medium, and long term.
S1 is built around four pillars borrowed from the Task Force on Climate-related Financial Disclosures (TCFD): governance, strategy, risk management, and metrics and targets. Reporters must disclose information on the full range of sustainability topics (not just climate) using an enterprise value lens — i.e., what matters to investors and other providers of capital, rather than the broader "double materiality" approach adopted by the EU's Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS).
Key features include:
- Connected information: sustainability disclosures must be linked to the financial statements and prepared for the same reporting entity and period.
- Industry guidance: S1 requires reporters to consider the SASB Standards when identifying relevant topics and metrics.
- Proportionality reliefs: a "climate-first" transition relief in year one, and allowances for use of reasonable and supportable information available without undue cost or effort.
The standard absorbs the work of the TCFD (whose monitoring role transferred to the ISSB in 2024), the Value Reporting Foundation (SASB + IIRC), and CDSB. Jurisdictions including the UK, Canada, Australia, Japan, Brazil, and Singapore have announced plans to adopt or endorse ISSB-aligned standards. IOSCO endorsed S1 and S2 in July 2023, recommending its 130 member jurisdictions consider adoption. S1 itself is not legally binding until a national regulator mandates it.
Example
In September 2024, the Australian government legislated mandatory climate disclosures based on IFRS S1/S2, with large entities required to report from financial years beginning 1 January 2025.
Frequently asked questions
S1 uses a single-materiality (enterprise value) lens focused on investors, while the CSRD and its ESRS require double materiality, covering both financial impacts on the company and the company's impacts on people and the environment.
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